Assume an economy with no foreign sector, a marginal propensity to save of mps = 0.1, and a marginal income tax rate of t-1/3. What change in government purchases would lead to an increase in national income of 500? Select one: a. 50 b. 200 C. 500 d. 100 e. 300 O O O O

Assume an economy with no foreign sector, a marginal propensity to save of mps = 0.1, and a marginal income tax rate of t-1/3. What change in government purchases would lead to an increase in national income of 500? Select one: a. 50 b. 200 C. 500 d. 100 e. 300 O O O O

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter23: The Aggregate Expenditure Model

Section: Chapter Questions

Problem 8P

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Question

Assume an economy with no foreign sector, a marginal propensity to save of mps = 0.1, and a marginal income tax rate of t = 1/3.
What change in government purchases would lead to an increase in national income of 500?
Select one:
a. 50
b. 200
c. 500
d. 100
e. 300
O
O
O

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